CREDIT CARD DEFAULT

Published By The Daily Star on September 08, 2015 (Link Above)

This week Your Advocate is Barrister Omar Khan Joy, Advocate, Supreme Court of Bangladesh. He is the head of the chambers of a renowned law firm, namely, ‘Legal Counsel’, which has expertise mainly in commercial law, corporate law, family law, employment and labor law, land law, banking law, constitutional law, criminal law, IPR and in conducting litigations before courts of different hierarchies.

Query:
Greetings and Salutations!  My friend’s mother was involved in a business.  She was very rich and afforded several personal credit cards.  But 5 years ago she suddenly became bankrupted.  Now she has huge debts on her shoulder and incapable to pay.  But the bank’s debt collectors are harassing and threatening her day and night over telephone.  They even threatened me (though I wasn’t related).  That’s why I’m asking you several questions given below,

1.    Does a bank has permission from the government to harass their clients to collect credit card overdue in Bangladesh?

2.    Does a bank has permission from the government of Bangladesh to issue an arrest warrant without notifying the client for credit card overdue?

3.    Can a client take legal steps against these coerce behaviors from the debt collectors in Bangladesh?

Shawon Hussain
Dhaka

Response 
Thank you for your query. It is important to clarify at the very outset that no form of harassment is legally permitted. I understand that your friend’s mother owes the Bank the outstanding amounts from the credit card loans/expenditure. The Bank, therefore, has a valid and lawful claim against her for such amount along with interest accrued on the overdue.

The Card Issuer Bank must act within the legal parameter for such recovery. In most of the cases, credit cards are issued by the Card Issuer Bank’s without obtaining any security from the Customer. However, in majority of the cases, the Issuer Bank receives cheques covering the credit amount from the customer and may try to recover the overdue by encashing the cheque. If the cheque is dishonoured, the Bank can take criminal action under the Negotiable Instrument (NI) Act, 1881. But, action under NI Act has some specific procedural requirement prior to commencing a case and as such a warrant cannot be issued by the court at the first instance. You may find the following link interesting to know more about NI Act cases: http://www.thedailystar.net/law-our-rights/cheque-dishonour-72010

The Bank may alternatively commence civil procedure for recovery of overdue amount through the Artha Rin Adalat. However, in most of the situations, the cost involved in proceeding with an Artha Rin suit and the overdue amounts do not commensurate. Some of the Card Issuer Banks resort to improper and informal mechanisms of recovery of money. It is also clear from your situation that the Card Issuer Bank has adopted the means of harassment with a view to recover money.

The central banks’ guideline, namely, ‘Guidelines of Credit Card Operations of Banks’ clause 13(iii) has very clearly and specifically mentions “Any verbal or physical harassment or threats to the Customers, their family members, references or friends shall not be resorted in the recovery process.”

You may consider the possibility of lodging a GD (General Diary) to your local police station regarding the threats. A GD is received by the Duty officer or Service Delivery Officer of the police station and is kept under the supervision of the Officer-in-Charge (OC) of the police station. Your GD shall mention elaborately all incidents of harassment, coercion and threats undergone by you and your friend’s mother, including what have been said or done during such instances. The OC shall then inquire into the matter and take appropriate legal steps. Alternatively, you may file an Ejahar (complain) before the police station to commence a criminal case for harassment. Further or alternatively, you may lodge complain to the Bangladesh Bank: See: [https://www.bb.org.bd/complainbox/complainbox.php]

As stated above legal claim cannot be recovered through illegal means and as such you and/or your friend’s mother can always recourse to law for the harassment towards you. On the other hand, please bear in mind that though the Card Issuer Bank has indulged into illegality in an attempt to recover the lawfully entitled amount, the card defaulter is legally bound to reply the outstanding amount. Therefore, it is strongly advised to make sincere effort to replay the outstanding amount at the earliest to avoid complexity of facing legal cases as well as to cap the interest of the accrued amount from increasing further. The card-holder shall meet the bank officials and request them to reschedule so that the outstanding amount can be repaid in certain installments. Most of the banks are very reluctant to reschedule credit card dues. Nevertheless, attempts can always be made.

For detailed query contact: omar@legalcounselbd.com.